Real Estate Investing 101: The Cap Rate

The capitalization rate is the return you would receive on an investment property if you paid cash for it. It’s meant as a way to compare an investment in real estate vs some other type of investment, like a stock. It’s calculated by dividing the net operating income (rent you receive minus expenses such as taxes, maintenance fees and repairs) by the purchase price of the unit. The cap rates for Vancouver properties tend to be lower than many other N. American cities. However, a city like Vancouver makes up for it with superior price appreciation (Capital Gains) over time.

This entry was posted on April 6th, 2016 by Owen Bigland | Posted in Video Blog